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Central Excise - Case Laws
Showing 241 to 260 of 81317 Records
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2024 (9) TMI 1658
Dismissal of application for restoration of appeal - non-compliance under the provisions of Section 35F of the Central Excise Act, 1944 - It is the contention of the appellant that they have made pre-deposit of Rs. 67,300/- i.e. 10% of the total amount in dispute on 08.10.2014, which is much after filing of the appeal - HELD THAT:- As the appellant/applicant has complied with the mandatory provisions of Section 35F of the Central Excise Act, 1944, therefore, the order dated 08.04.2015 is recalled by dismissing the appeal for non-compliance under the provisions of Section 35F of the Central Excise Act, 1944.
The Miscellaneous Application for restoration of appeal is allowed.
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2024 (9) TMI 1655
Classification of goods - Siapton 10L - Isabion - classifiable under ETI 3101 00 99 as a fertilizer or under ETI 3808 93 40 as a plant growth regulator? - whether the mode of usage of the product through soil or foliar application is a determinative test for classifying the goods under ETI 3101 00 99 or ETI 3808 93 43? - HELD THAT:- ETI 3101 00 99 and ETI 3808 93 40, when read with the relevant section and Chapter Notes and the HSN Explanatory Notes, do not provide a distinction based on the mode of usage of such elements. It needs to be noted that water-soluble fertilizers are used for soil and foliar applications.
When plant nutrients are applied by foliar application, smaller quantities of fertilizer materials are required when compared to application through the soil. Upon foliar application of the macronutrient fertilizer, the nutrients enter the leaves through the stomata, correct the disorders, and improve the yield and quality of the produce. Urea is generally suitable for foliar application owing to its high solubility, ease, and quick absorption by the plant tissue - It is an undisputed fact that plants absorb nutrients through their roots or foliage. Generally, in situations where soil conditions are not favorable, it is desirable to make foliar applications of the plant nutrients.
It is also important to notice that plant growth regulators are also used for soil and foliar applications. The EU Explanatory Note to ETI 3808 93 90 makes it aptly clear that the plant growth regulators can be applied to the whole plant or parts of the plant or to the soil - the test based on mode of application would not be a correct test.
Whether the two products, namely, Siapton 10L and Isabion are fertilizers or plant growth regulators? - HELD THAT:- P.I. Industries has stated that the product Siapton 10L has amino acids alone. It has clarified that 54% of the product is pure amino acids and the remaining ingredients are peptides and micronutrients, which are short chain amino acids. Dr. R. Uma Shankar in his opinion dated 08.01.2013 has confirmed that amino acids and peptides can be regarded as bio-stimulants and should be treated as organic nutrients or organic fertilizers and not as classical plant growth regulators. Isagro SPA, Italy which supplied the product to P.I. Industries has specifically stated that Siapton 10L is a product based on organic nitrogenous compounds (amino acids and peptides) and so should be considered as nitrogen based fertilizer with nitrogen in organic form only, incorporated in amino acids and peptides. It has also stated that Siapton 10L is not a plant growth regulator as it does not modify or control or alter any physiological process - SICIT, the company which supplied Isabion to Syngenta in bulk, has also in its communication dated 28.08.2012 stated that Isabion is an organic bio-stimulant and contains a well balanced and optimal ratio between short chain peptides, long chain peptides and free amino acids. The product label of Isabion also mentions that Isabion contains a well balanced and optimal ratio between short chain peptides, long chain peptides and free amino acids.
It needs to be noted that “bio-stimulants”, being a fertilizer, was brought under this Control Order by Order dated 23.02.2021 issued by Ministry of Agriculture and Farmers Welfare. The definition of “bio-stimulants” contained in the aforesaid Order excludes plant growth regulator, which have been stated to be regulated under the Insecticides Act, 1968. It is true that the aforesaid definition of “bio-stimulants” was included in the Fertilizer Order by Order dated 23.02.2021 of the Ministry, but as the Ministry has clearly expressed that bio-stimulants would exclude plant growth regulators, the definition would certainly provide guidance - It can, therefore, be said that fertilizers provide essential nutrients for plant growth and health, while plant growth regulators are chemicals that influence specific aspects of plant growth and development by regulating physiological processes. Both are vital tools in modern agriculture to optimize plant growth and maximize crop yields.
The two products, namely, Siapton 10L and Isabion merely provide nutrients to the plant. They do not alter the physiological processes in a desired direction. In other words, the amino acids and the nitrogen present help in cell building exercise, and thereby, help the plant grow using the nutrients (nitrogen, phosphorus and potassium). Therefore, the two products Siapton 10L and Isabion are in the nature of fertilizers (bio-stimulants) and not plant growth regulators.
The aforesaid discussion leads to the inevitable conclusion that the Division Bench, while referring the matter to the Larger Bench, was not justified in distinguishing the earlier decision of the Tribunal in Northern Minerals [2001 (5) TMI 74 - CEGAT, COURT NO. III, NEW DELHI]. The two products, namely, Siapton 10L and Isabion deserves classification as fertilizers under ETI 3101 00 99 and not as plant growth regulators under ETI 3808 93 40.
The reference is answered, accordingly. The papers may be placed before the Division Bench of the Tribunal to decide the appeals on merits.
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2024 (9) TMI 1647
CENVAT Credit - outward transportation of the finished product namely cement from the factory / to dealers to the buyer’s premises - HELD THAT:- The issue of eligibility of credit on outward transportation of goods has been considered by the Tribunal in the appellant’s own case for different periods and the matters have been remanded. The Tribunal observed in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF CGST & CENTRAL EXCISE, TRICHY [2024 (7) TMI 680 - CESTAT CHENNAI] where it was held that 'the Tribunal had considered the definition of input services prior to 01.04.2008 as well as after 01.04.2008 and held that the credit is eligible.'
The matter requires to be remanded to the Adjudicating Authority for ascertaining the place of removal and also for considering whether the appellant is eligible for Cenvat Credit of service tax paid on outward transportation. The impugned orders are set aside - Appeal allowed by way of remand.
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2024 (9) TMI 1646
CENVAT Credit - freight charges for outward transportation - credit is availed beyond the time limit of 6 months / 1 year - time limitation.
CENVAT Credit - freight charges for outward transportation - HELD THAT:- The very same issue was considered by the Larger Bench of the Tribunal in M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY [2023 (12) TMI 1332 - CESTAT CHENNAI-LB] in which it was held that after the ascertainment of the place of removal, the assesse would be eligible for credit if the place of removal is buyer’s premises / depots.
Following the same, the Tribunal in the appellant’s own case M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF CGST & CENTRAL EXCISE, TRICHY [2024 (7) TMI 680 - CESTAT CHENNAI] had remanded the matter. Accordingly, this issue requires to be remanded to the adjudicating authority who is directed to ascertain the place of removal in accordance with Large Bench decision of the Tribunal and also to consider whether the appellant is eligible for credit.
Disallowance of credit alleging that the credit is availed beyond the time limit of 6 months / 1 year - HELD THAT:- In order to protect their right of credit, they were availing and reversing the credit to avoid unnecessary proceedings. The credit has been denied for the reason that it is availed beyond the period of time limit prescribed under sub-rule (7) of Rule 4 of CCR 2004. It has been held that the time limit prescribed cannot apply to invoices issued prior to the date on which the restriction came into force. This issue also needs to be looked into by the adjudicating authority. The issue of delay in taking credit was considered by the Tribunal in the Final Order dt. 10.07.2024 and the matter was remanded for reconsideration by the adjudicating authority.
The impugned order is set aside. The appeal is allowed by way of remand to the adjudicating authority.
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2024 (9) TMI 1645
Recovery of Central Excise duty with interest and penalty - plastic waste or not - popcorn waste used by the appellant for manufacturing PSF - benefit of NIL rate of duty under Serial No. 172A of the N/N. 17.03.2012 and concessional rate of duty @ 2% under Serial No. 70A of the Notification dated 01.03.2011 - Extended period of limitation under section 11A(4) of the Central Excise Act - suppression of facts or not - Imposition of penalty on Director.
HELD THAT:- It is not in dispute that PET bottles scrap constitutes 90 percent of the raw material that is used and the percentage of popcorn waste used in the manufacture of PSF is less than 10 percent.
In Tata Iron and Steel [1975 (12) TMI 79 - SUPREME COURT], the Notification of which benefit was claimed granted exemption to duty paid pig iron but duty paid pig iron was also mixed with other non duty paid materials. It is in this context that the Supreme Court held that if the intention of the government was to exclude exemption to duty paid pig iron when mixed with other materials, then the Notification would have used the expression, ‘only’ or ‘exclusively’ or ‘entirely’ in regard to duty paid pig iron but these expressions were not used. Thus, the benefit of the exemption could not have been denied.
In the absence of the word ‘only’, ‘exclusively’, wholly’ or ‘entirely’ in the two Notifications, the benefit of the two Notifications could not have been denied to the appellant merely for the reason that apart from using 90 percent PET bottles scrap, the appellant also used approximately 10 percent of popcorn waste in the manufacture PSF.
Whether popcorn is plastic waste? - whether denial of nil/concessional duty to PSF manufactured by the appellant on the ground that ‘popcorn’ in not plastic waste, is justified? - HELD THAT:- The benefit of the Notifications has also been denied to the appellant for the reason that ‘popcorn’ is recycled PET material and not plastic waste and, therefore, would not fall within the scope of the Notifications. It should not be forgotten that the purpose of the Notifications is to encourage manufacturers to use plastic material and help in recycling of plastic waste. The view taken by the adjudicating authority defeats this very purpose.
The adjudicating authority has examined ‘popcorn’ to see whether it is a plastic waste, classifiable under Customs Tariff Heading 3915 of the Customs Tariff Act, 1975. The Notifications do not provide that ‘only’ plastic waste or plastic scrap falling under Customs Tariff Heading can be used as inputs in the manufacture of PSF. There is no dispute that ‘popcorn’ waste used by the appellant is manufactured from waste of plastic, yarn and textile. The adjudicating authority has failed to appreciate that plastic scrap or plastic waste is not restricted to Chapter 39 only, and such an interpretation has the effect of adding words or conditions in the said Notifications.
Extended period of limitation - HELD THAT:- The present appeal relates to the period from March 2013 to 02.01.2017. The show cause notice was issued on 21.03.2018. The demand raised for period up to February 2016 amounting to Rs. 53,56,90,049/- out of the total demand of Rs. 66,44,69,751/- would be beyond the normal period of limitation. This demand has, however, been confirmed by invoking the extended period of limitation contemplated under section 11A(4) of the Central Excise Act on the ground that the appellant had procured ‘popcorn’ in the guise of PET bottle flakes and mis-declared the description of the goods in the invoices with intent to evade payment of duty and avail the benefit of the Notifications, which fact would otherwise have gone unnoticed if the investigation had not been carried out.
An audit of the records of the appellant had also been conducted, but objection relating to wrong availment of the benefit under the exemption Notifications was never raised. It had also been stated by the appellant in the reply to the show cause notice that the appellant had never denied using miniscule quantity of ‘popcorn’ for manufacturing PSF and in this connection, the appellant had referred to the various statements tendered to the department at the time of investigation. It was, therefore, stated in the reply that once all the facts were available with the department, the department cannot allege that the appellant had suppressed any material fact.
The impugned order merely mentions that ‘it is not the case of the noticee that they had produced all the relevant records to the audit team’. This finding is merely based on a presumption. It is expected that when an audit is carried out, all the relevant documents are examined by the officers who conduct the audit. The adjudicating authority cannot draw an inference that since an objection was not raised by the audit team, the appellant must not have disclosed all the documents to the audit team. The department, at all stages, had an opportunity to question the appellant within the stipulated time but that was not done. Even otherwise, the appellant had in the reply clearly mentioned that from the various statements tendered to the department at the time of investigation, the appellant had never denied that it was using minuscule quantity of ‘popcorn’ for manufacture of the final product.
It must also be remembered that mere suppression of fact is not enough. There has to be a deliberate attempt to evade payment of excise duty. The show cause notice must specifically deal with this aspect and the adjudicating authority is also obliged to examine this aspect in the light of the facts stated by the assessee in reply to the show cause notice.
The provisions of section 11A (4) of the Central Excise Act came up for interpretation before the Supreme Court in PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [1995 (3) TMI 100 - SUPREME COURT]. The Supreme Court observed that section 11A(4) empowers the Department to reopen the proceedings if levy has been short levied or not levied with in six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power with in five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. It is in this context that the Supreme Court observed that the act must be deliberate to escape payment of duty.
In EASLAND COMBINES VERSUS COLLECTOR OF C. EX., COIMBATORE [2003 (1) TMI 107 - SUPREME COURT] the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation.
It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty.
In the present case, the show cause notice alleged that the appellant had suppressed using ‘popcorn’ in the manufacture of PSF and this fact was suppressed from the department with the sole intent to evade payment of duty by availing the benefit of the two Notifications - the appellant had filed ER-1 returns and disclosed the necessary facts required to be disclosed. There is, therefore, no suppression by the appellant of material facts from the department, much less with an intent to evade payment of central excise duty. The extended period of limitation contemplated under section 11A(4) of the Central Excise Act, therefore, could not have been invoked in the facts and circumstances of the case.
Penalty upon the Director - HELD THAT:- The imposition of penalty upon the Director of the appellant under rule 26(1) of the Central Excise Rules has also been questioned by the learned counsel for the appellant. It has been stated that no evidence has been disclosed by the department to prove that the Director dealt with the goods which were liable to confiscation with knowledge about the liability to confiscation. According to the learned counsel for the appellant, such a finding has not been recorded nor evidence was brought on record by the department.
The impugned order dated 16.09.2020 passed by the adjudicating authority deserves to be set aside and is set aside. The two appeals are, accordingly, allowed.
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2024 (9) TMI 1593
100% EOU - Classification of spent solvent as waste or by-product - basic contention of the department was that the spent solvent emerging during the manufacturing process of bulk drugs is a by-product and not a waste and scrap and therefore, the appellant has wrongly availed the benefit of exemption N/N. 23/2003-CE dated 31.03.2003 - HELD THAT:- The matter is no longer res-integra as the issue has already been decided by Hon’ble Andhra Pradesh High Court in the case of COMMISSIONER OF C. EX., HYDERABAD-I VERSUS AUROBINDO PHARMA LTD. [2010 (10) TMI 175 - ANDHRA PRADESH HIGH COURT] which has also been upheld by the Hon’ble Supreme Court in COMMISSIONER VERSUS AUROBINDO PHARMA LTD. [2011 (5) TMI 925 - SC ORDER], where it was held that 'It has been clearly brought out that the spent solvents had already been utilized in the factory and latter it had undergone further purification for reuse. The excess spent solvents were sold to the outsiders, as it had lost its value and therefore, what was sold was not new goods but only spent solvents which had undergone certain purification process. Such purification process of chemicals has been held to be not a process of manufacture.'
The impugned order-in-appeal is not sustainable in law and therefore set aside - appeal allowed.
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2024 (9) TMI 1592
CENAVT Credit - refund of of accumulated Cenvat Credit - it is alleged that appellant has not received the inputs and has taken the Cenvat Credit as well as the refund on the basis of fake invoices - extended period of limitation - Penalties on the partner and the Manager.
HELD THAT:- On going through the various decisions arising out of the same investigation conducted by the Commissionerate, C.E., Meerut-II, on the basis of which, SCN was issued. Further, it is found that the issuance of SCN is based on assumptions and presumptions and no investigation was made at the end the consigners who have issued the invoices on the basis of which, the appellant had taken the Cenvat Credit.
It is also found that the appellant had produced a number of evidences in respect of all 53 consignments such as copies of toll-receipts evidencing crossing of J&K border and the report of Excise & Taxation Authority, Patiala (Punjab) evidencing the entry of all vehicles carrying consignments at Madhopur Check Post etc., but the same were completely ignored by the Adjudicating Authority to confirm the demand.
This issue is no more res integra and the Tribunal has already decided a number of cases arising out of the same investigation and evidence put forth by Meerut-II, Commissionerate and all the appeals have been allowed by the Tribunal in favour of the assessees.
Extended period of limitation - HELD THAT:- It is found that substantial demand is barred by limitation because the appellants have not concealed any facts from the department and have been regularly filing ER-2 Returns. The copies of all the returns have also been produced on record. The appellants have also produced a number of documentary evidences to show that they had exercised due diligence in following all the prescribed procedures and also declared all requisite information in their ER-2 Returns.
Penalties on the partner and the Manager - HELD THAT:- There is nothing on record to show that they have violated the provisions of Rule 26 of the Central Excise Rules, 2002 because the said rule does not talk about any offending goods, instead it talks about dealing etc with goods which are liable to confiscation; therefore, we hold that penalties under Rule 26 ibid on the partner and manager are incorrect in law.
The impugned order is not sustainable in law and is liable to be set aside - Appeal allowed.
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2024 (9) TMI 1591
Classification of corrugated board - whether corrugated board cleared by the respondent independently without corrugated box is classified under Tariff Item 48191090 and accordingly not eligible for exemption Notification No.04/2006-CE dated 01.03.2006 as claimed by the appellant treating the classification under 48191010 as corrugated cartons, boxes and cases? - HELD THAT:- It can be seen that 481910 covers cartons, boxes and cases, of corrugated paper and paperboard, 48191010 covers boxes, 48191090 is other. However even 48191090 mentioned other but on reading entry under 481910 except boxes all other items such as cartons and cases of corrugated paper and paperboard falls under 48191090. When this be so then even though goods of 48191090are clearly covered under the exemption Notification No.04/2006-CE under entry No.96E. Therefore, firstly it is opined that even if classification suggested by the Revenue under 48191090 is accepted then also the goods covered under that sub heading is covered under exemption.
Even if the corrugated sheet as in the appellant case cleared without having boxes, the same is appropriately classifiable under 48081000. The rate of duty on the goods under 48081000 as well as under 48191010 read with Notification No.04/2006-CE are same during the relevant period and for this reason the adjudicating authority has rightly dropped the demand raised in the show cause notice. The adjudicating authority is agreed to classify the goods in question i.e. corrugated sheet, platecleared without corrugated boxes under 48081000.
There are no infirmity in impugned order. Hence, the impugned order is upheld - Revenue’s appeal is dismissed.
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2024 (9) TMI 1590
Classification of goods - Zero Air - whether the ‘Zero Air’ cleared by the appellant during the period December 2002 to June 2007 is classifiable under Chapter heading 2851 as compressed air attracting NIL rate of duty or classifiable under Chapter heading 2804 attracting 16% duty as confirmed in the impugned order? - HELD THAT:- The process of manufacture of Synthetic Air and Compressed Air are different; however, from the evidences collected by the Department viz. statement of Mr. M. Dhananjay, Manager of M/s. Somu Solvents (P) Ltd. who are engaged in the manufacture of Glycol ether acetates and other solvents. It is stated that they purchased Zero Air from the appellant and categorically stated that the said Zero Air contains 78% of Nitrogen, 20.8% of Oxygen and 1.2% of Argon and they do not use the same as Compressed Air in or in relation testing their manufacture of their finished products, since Compressed Air cannot be used in Gas Chromatograph test; besides, composition of Compressed Air is not of required standard for Gas Chromatograph test. Further it is stated by him that there is no difference between Synthetic Air and Zero Air as both are one and the same. In his statement dated 07.11.2007, Mr. Devendra Kumar, Scientist of M/s. EID Parry (India) Limited, Bangalore has also categorically disclosed that they purchased Zero Air from the appellant and the same is used for Gas Chromatograph test by them, to which Compressed Air cannot be a substitute.
It is found that the clearance of Zero Air classifying the same under Chapter Heading 2851 as Compressed Air itself involved suppression of facts. Therefore, invocation of extended period, in our view, is justified. Besides that, from July 2007, accepting the classification as pointed out by the Revenue subsequent to visit of their factory, the appellant discharged duty for clearance of the said Zero Air classifying the same under Chapter Heading 2804.
There are no merit in the appeal. consequently, the impugned order is upheld and the appeal is rejected.
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2024 (9) TMI 1589
CENVAT Credit - input service - whether post manufacture and clearance from the factory at Limda, Vadodara and enroute to the premises of the OEM, when the tyres are required to be stored in godowns during transit, whether service tax on godown rent as well as security personnel etc. is an eligible input service? - HELD THAT:- From the terms and conditions of the supply and the observations of the Adjudicating Authority, it is absolutely clear that there is no dispute that the sale of goods gets completed only at the buyer’s premises therefore, since the appellant is under obligation to deliver the goods at the customer’s premises, the sale gets completed only after delivery of the goods. In this fact, all the expenses till the delivery of the goods deemed to have been included in the sale value of the excisable goods.
Therefore, for the purpose of Cenvat credit, since the expenses upto the delivery of goods is includible in the excisable goods and excise duty was paid thereon, such services are eligible input service and credit is admissible, as held by this Tribunal in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1488 - CESTAT AHMEDABAD] and ULTRATECH CEMENT LTD. VERSUS COMMISSIONER OF C. EX., BHAVNAGAR [2007 (3) TMI 738 - CESTAT AHMEDABAD].
The impugned orders set aside - appeal allowed.
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2024 (9) TMI 1491
Denial of SSI exemption - denial on the ground that goods cleared by the appellant bore brand name ‘YES’ and ‘SAFE’ and both the brand names are not registered in the name of appellant - penalties.
Denial of SSI exemption - Demand of central excise duty on clearance of mineral water bearing brand name ‘SAFE’ - appellant had contended that the brand “SAFE” was owned by it and it was not owned by any other person - HELD THAT:- The appellant has come out with a categorical case that it purchase the brand “SAFE” from one Abhay Kumar Jain, proprietor of M/s Siddhi Corporation, Jodhpur under a sales agreement dated 06.06.2008.
It is no doubt true that the sales agreement was not registered and that the brand name was not reflected on the site of Trade Make, but the appellant has come out with a case that Siddhi Corporation had not got the brand name registered in its name from the Trade Mark Authority. Merely because the appellant did not get the brand name registered in its own name, it cannot be urged that the exemption cannot be denied for the reason that nothing has been brought on record by the department to show that the brand name is in the name of some other person.
Reference can be made to the decision of the Tribunal in Mukur Pharmaceuticals Co. P. Ltd. vs. Commr. of C.Ex., Chandigarh [2000 (3) TMI 668 - CEGAT, NEW DELHI], wherein it was observed 'The onus of proof is on the department to show that the brand name belongs to another person.'
Confirmation of the demand on mineral water cleared under the brand name ‘YES’ during the period from October, 2014 to August, 2016 - appellant contends that mineral water with ‘YES’ brand was cleared to M/s. Bhagwati Beverages, Jodhpur under an agreement which allows the appellant to process, pack and sell mineral water with brand name ‘YES’ to them alone and not to consumers or in the market - HELD THAT:- M/s. Bhagwati Beverages clearly knew that the brand name did not belong to the appellant and, therefore, the brand name did not in any way indicate any connection in the course of trade between such specified goods and the appellant. According to the appellant, all the packing materials printed with brand name ‘YES’ were provided by M/s. Bhagwati Beverages, who in fact sold such packed goods to the customers who know that they were buying mineral water with the brand name ‘YES’ of M/s. Bhagwati Beverages - appellant would, therefore, be entitled to exemption under the exemption notification dated 01.03.2003.
The penalty imposed upon the appellant or upon Tapan Rai or upon Manju Jain cannot also be sustained.
The impugned order dated 17.05.2019 passed by the Commissioner (Appeals), therefore, deserves to be set aside and is set aside - Appeal allowed.
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2024 (9) TMI 1490
Undervaluation of final product cleared by the appellant - demand based upon the evidences such as the statements of various dealers who had stated that the tiles which are manufactured and cleared by the appellant are sold at a price more than the MRP/RSP declared on such tiles - HELD THAT:- The orders impugned in the instant case were similar in the case to the orders impugned in the cases decided in the decision of Acme Ceramics [2014 (3) TMI 164 - CESTAT AHMEDABAD]. When the matter came up before this bench, the aforesaid decision of Tribunal in the case of Acme Ceramics was doubted and the matter was referred to the Larger Bench - the Larger Bench held that 'It is not permissible to ascertain the retail sale price of goods removed from the place of manufacture, without declaring the retail sale price of such goods on the packages or declaring a retail sale price which is not the retail sale price or tampering with, obliterating or altering the retail sale price declared on the package of such goods after their removal from the place of manufacture, in respect of clearances made prior to 01.03.2008, on which datethe Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 came into force'.
It is apparent that the interim order removes the doubts raised by this bench with respect to the decision in case of Acme Ceramics. Consequently, the earlier decision of Tribunal in the case of Acme Ceramics becomes a binding precedent decision that needs to be followed in the instant case.
Consequently, following the decision in case of Acme Ceramics the matters are disposed of in identical terms - the demand for the period prior to 01.03.2008 are set aside as also the penalty imposed on the manufacturer assessee and other individuals. For the period post 01.03.2008, the demands are set aside and matters remanded back to the adjudicating authority to reconsider the same.
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2024 (9) TMI 1413
Interpretation of the Notification Nos.41 of 1998 and 42 of 1998 - entitlement to the benefits of the Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 - respondent had installed the Hot Air Stenter and was an independent processor falling within the purview of Section 3A of the Central Excise Act, 1944 - HELD THAT:- On perusal of the Notifications, it is clear that the Tax Appeal would be maintainable only if there is a question of constitutional validity of the provision of the Act or the Rules is under challenge or the cases where the Notification / Instruction / Order / Circular is held to be illegal or ultra vires.
In the facts of the present case, none of the above conditions are fulfilled and, therefore, in view of the Instructions, the Appeals would not be maintainable in spite of the instructions of the respondent authorities to the learned advocate for the appellant to proceed with the matter on merits.
The appeals are dismissed.
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2024 (9) TMI 1412
Application for rectification of mistake - pending appeals before the Supreme Court - HELD THAT:- The subject-matter of the appeals are not challenged as abundant items of the appellant. Therefore the respondent can independently proceed with the same and the respondent/Department challenge the order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, in Nos.E/510,E.208/2011, E.365/2011, E/40915 – 40918/2015 and now the same is pending with the Honourable Supreme Court. Further pending appeals, the appellant has filed application for rectification of the mistake and for which, the Tribunal has passed the above said order. Though the learned counsel for the appellant would submit that the appellant is not enttled to get an order in favour of them in the Rectification Application, but however, on a perusal of the order passed by the Tribunal, it is seen that they have nothing to with the merit or entitlement or any mistake that has been committed.
The orders impugned herein are set aside and the matter is remitted back to file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai and the Appellate Tribunal is directed to consider the said application for rectification filed by the appellant and pass orders in accordance with law after giving an opportunity of hearing to both the parties and the parties are at liberty to raise their objections, grounds or points, as the case may be, before the Appellate Tribunal.
Appeal disposed off.
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2024 (9) TMI 1411
Confirmation of demand of incorrectly availed input cenvat credit, along with interest and penalty - time limitation - HELD THAT:- There is no doubt that the market was not encouraging insofar as the new products claimed to have been launched by the appellant for which, its overseas partner provided financial assistance, which is termed by the Indian entity as reimbursement towards shortfall/compensation, etc. We are afraid the said claims of the Indian entity cannot decide the taxability or otherwise. Understandably, payment as in the case in hand, which may be in the nature of compensation, but is clearly towards keeping the Indian entity alive and kicking and to meet various expenditure including overheads. That therefore, is certainly not per se towards the clearance of a manufactured product and hence, there was no question of CENVAT credit being availed, just because the Indian entity chose to pay service tax. CENVAT credit, as governed by Rule 3 ibid is available to a manufacturer or the provider of taxable service of the input tax paid, which is used in the manufacture or provision of a taxable service, which is not the case here - the department is justified in holding that the credit has been wrongly availed, which therefore was required to be recovered as the same was not in accordance with law.
Extended period of limitation - HELD THAT:- The issue is required to be considered from a larger perspective, in the sense that they said claim was part of the statutory returns/periodical returns filed by the appellant which were picked up by the revenue and hence, there was no scope to invoke the larger period of limitation. Other than an assertion that during audit of the returns, the team picked up this issue itself suggests that there is nothing hidden/suppressed; and other than this, the revenue has not placed anything on record to support its above ground to justify its claim about suppression and the consequential invoking of the larger period of limitation.
The Revenue has not at all established the fact of suppression for invoking the extended period of limitation for recovery of wrongly availed CENVAT credit. Hence, the impugned order does not sustain - the impugned order is set aside - appeal allowed.
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2024 (9) TMI 1410
Challenge to direction that the liability on each and every individual should be fixed separately - HELD THAT:- From the operating potion of the order, it can be seen that the liability and recovery of rebate amount Rs. 65,54,595/- was once again confirmed against the Shri Mahesh M Harlalka and Shri Pradip Sharma jointly. It is clearly against the direction of the Tribunal whereby it was directed that the liabilities against each person should be fixed separately. However, the liability of Rs. 65,54,595/- was confirmed jointly on both the aforesaid person. Therefore, the order impugned was passed without following the order of the Tribunal, hence, the same is not sustainable. Accordingly, the impugned order is set aside and matter remanded to the Adjudicating Authority to pass a fresh order fixing liability separately against each person.
The appeals are allowed by way of remand to the Adjudicating Authority.
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2024 (9) TMI 1409
Interest on differential duty on the escalated value - suppression, mis-statement and willful default payment of appropriate leviable duty in the matter by choosing not to opt for provisional assessment in terms of Rule 7 of the Central Excise Rules, 2002 - extended period of limitation - HELD THAT:- It is evident that the Show Cause Notice for interest on differential duty on the escalated value was raised on 09/09/2013 i.e. well beyond normal period of limitation of one year from (31 March 2012) the date of payment of differential duty under the last of the aforesaid invoices. It is also noted that the contention of the department with regard to mis-declaration, suppression etc. is clearly not attracted in the present matter as complete facts of the case and the scheme of assesse’s transactions, work methodology and clearance of finished goods was well within the knowledge of the Department. Any fraud or collusion or suppression for that matter cannot be read under the aforesaid scheme of operation to suggest any intention to evade payment of duty, more so since it has been a regular practice of the assessee’s working.
For a SCN invoking the larger period of time in terms of the provisions of Section 11A(1) ingredients thereto like fraud, collusion, willful misstatement, suppression of fact etc. are required to be evidently established. However, it is found that no such ingredient actually exists in the matter and merely holding non-availment of provisional assessment procedure as a valid ground to invoke longer limitation to understating belies reasonability and logic. For a show cause notice invoking normal period of limitation, it is required to be served on the noticee within one year of the relevant date and the period of one year would be required to be counted from the date of the return for the month concerned with short payment of duty. In the present case the notice is issued on 19.09.2013, which is well beyond normal period of limitation - the extended period of limitation is not invokable in the facts and circumstances of the case. The demand for payment of interest being beyond normal period of limitation is therefore unsustainable and liable to be set aside.
Whether the appellant is liable to pay the interest on supplementary invoices by invoking extended period of limitation or not? - HELD THAT:- The said issue has been dealt by this Tribunal in the case of COLLECTOR OF CUSTOMS, MADRAS VERSUS TVS. WHIRLPOOL LTD. [1996 (4) TMI 232 - CEGAT, MADRAS] and as maintained by the Hon’ble Apex Court in CCE VERSUS TVS WHIRLPOOL LTD. [1999 (10) TMI 701 - SC ORDER] wherein it has been held by the Apex Court that “it is only a reasonable time that the period of limitation that applies to a claim for the principal amount should also apply to the claim for interest thereon.”
Thus, the extended period of limitation is not invokable for the facts and circumstances of the case as the appellant has paid the duty on the supplementary invoices for the material period prior to issuance of Show Cause Notice and the same appropriated vide the impugned order. In that circumstances, the extended period of limitation for demand of interest, is not invokable. Consequently, the demand of interest on supplementary invoices is barred by limitation.
The impugned order qua demanding interest on the duty paid on supplementary invoices is set aside. Under the circumstances, no penalty is imposable on the appellant and the same is also set aside.
Appeal disposed off.
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2024 (9) TMI 1408
Refund of accumulated Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004 - supply to Mega Power Project and to SEZ - HELD THAT:- The facts are not in dispute that the appellant is a manufacturer of excisable goods which has been cleared to Mega Power Projects and SEZ units. Therefore, the appellant filed refund claim for accumulated Cenvat Credit under Rule 5 of Cenvat Credit, 2004. The said credit can be refunded in terms of CBEC circular no. 1001/8/2015 CE 8 dated 28.04.2015.
Further, the issue has been examined by this Tribunal in the case of CCE, FARIDABAD VERSUS M/S DELTON CABLES LTD. [2017 (5) TMI 557 - CESTAT CHANDIGARH] with regard to clearance to Mega Power Project and observed 'As the issue on account of clearances 100% EOU mega projects has already been attained finality, therefore we hold that the Ld Commissioner (A) has rightly allowed the refund claims to the respondents.'
As the appellant has cleared goods to Mega Power Projects and the SEZ units, therefore, the appellant is entitled for refund of accumulated Cenvat Credit lying in their cenvat credit account in terms of Rule 5 of Cenvat Credit Rules, 2004 - there are no merit in the impugned order.
The adjudication order sanctioning the refund claimed to the appellant is restored - appeal allowed.
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2024 (9) TMI 1357
Valuation - related person - inter-connected undertakings - seller and alleged buyers of the goods are related persons in terms of Section 4(3)(b) of the Central Excise Act or not - mutuality of interest - it was held by CESTAT that 'The transaction value of the goods between respondent and the so-called interconnected undertaking is correct valuation and the same cannot be disturbed, therefore, there are no merits in the appeal of revenue.'
HELD THAT:- No case is made out to interfere with the impugned judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad.
The Civil Appeal is accordingly dismissed.
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2024 (9) TMI 1356
Cash seizure - sale proceeds of clandestinely removed goods - pre-deposits made under section 35FF of the Central Excise Act - whether Respondents are justified in granting interest @6% per annum on the refund of cash seized although the said cash seized was deposited in fixed deposit and earned interest at more than 6% per annum? - HELD THAT:- On a reading of Circular 984 of 2014, the contention raised by Respondents to justify interest @6% per annum is erroneous. The said Circular was issued in the light of amendments made to section 35F of the Central Excise Act and 129E of the Customs Act whereby these sections were substituted by section 35FF and section 129EE, respectively, providing for certain percentage of the demand to be paid as a condition precedent for entertaining the appeal. It is also important to note that in the present case cash was seized on 29th August 2011 and therefore appropriation of cash seized during investigation towards any pre-deposit as a condition for filing an appeal also cannot arise. Therefore, the contention raised by Respondents to justify the impugned O-I-O on this count is to be rejected.
The Petitioner has not brought to our notice any provision to justify claim of interest @18% per annum and therefore such a claim cannot be granted to Petitioner. However, Petitioner’s alternative submission on grant of interest at the actual rate which the fixed deposit has earned is certainly required to be considered.
In the present case it is undisputed that at no point of time the cash seized was appropriated towards final tax dues and rightly so because the order discharging Petitioner of tax dues had attained finality. It is settled position that a trustee cannot enrich himself on behalf of the person for whom the money is held in trust. A trustee is supposed to account for each and every sum of money which is held in trust on behalf of the beneficiary. In the instant case, therefore, action of Respondents in granting interest @6% per annum when the fixed deposits arising out of cash seized from Petitioner have earned more than 6% per annum cannot be justified and Respondents are duty bound to handover the entire amount of interest which they have earned - Admittedly Petitioner cannot be faulted on account of this and Respondents have while granting interest, has granted interest for the period post the expiry of 10 years and Petitioner in his calculation has also reduced the same for arriving at the final claim.
An inquiry should be initiated by Respondents to ascertain the accountability on this aspect and fix the responsibility by taking appropriate action against the persons found negligent for non-renewal of the fixed deposits.
The impugned O-I-O dated 5th July 2024, Exhibit A to the petition is quashed and set aside - petitioner is not entitled to interest @18% per annum. However, is entitled to sum of Rs. 90,07,829/- being the interest in excess of 6% earned on fixed deposits arising out of cash seized from Petitioner - petition disposed off.
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